Erie Insurance to loan $11 million for Renaissance Centre project
by Moneyofficeteam 22 March 2024 · Insurance
Christian Siembieda says he’s already accounted for most of the $50 million needed to transform the Renaissance Centre at 10th and State streets.
Siembieda, a California-based investor, plans to remake Erie’s tallest building into an upscale 150-room hotel as well as space for restaurants, offices and public gatherings.
The project’s so-called capital stack — the sources of capital that support a real estate investment — includes both loans and investments from local and out-of-town sources, he said.
Erie Insurance steps up with funding
And it includes two loans, worth a total of $11 million, from Erie Insurance.
The first of those two loans, a $1 million mortgage from Erie Indemnity Corp. to 1001 State OZ Operator LLC, was recorded March 15 in the Erie County Courthouse.
More:Owner of Erie’s tallest building plans a $50 million facelift to include upscale hotel
Matthew Cummings, a spokesman for Erie Insurance, said the loan is a short-term mortgage to help fund what he called pre-development work on the 198-foot building.
Once that loan has been paid off, Erie Insurance plans to make a $10 million “long-term loan in support of that final capital stack,” Cummings said.
Siembieda said funding for the project is coming from a variety of sources, including loans and equity stakeholders who would become part owners of the 14-floor building.
More:Investment group buys Erie’s Renaissance Centre with plans to enhance downtown landmark
Siembieda, whose past and current holdings include New York City residential properties, power plants, grain silos, cell towers and a historic Main Street-style property in New Hampshire, is investing some of his own money through a Federal Opportunity Zone fund. Opportunity Zones provide special tax benefits to investors when they invest capital gains in federally designated low-income areas.
A plan to transform downtown Erie
Cummings said that Erie Insurance, Erie County’s largest employer, is pleased to support the project.
“We see this plan to transform this downtown Erie landmark as an exciting project for Erie and one that is complementary to the other work that is underway downtown,” Cummings said.
Both directly and indirectly, Erie Insurance has been a driving force behind much of that other development as the founder of the Erie Downtown Development Corp., which has invested more than $100 in revitalizing downtown Erie.
The plans for what was long known as the G. Daniel Baldwin Building also embody the hopes of EDDC leaders that their projects, including the Flagship City Food Hall and scores of new apartments, would prompt others to invest their own money in Erie.
Drew Whiting, CEO of the EDDC, talked in January about his hope that Erie could attract outside investors in addition to the local companies and individuals who have purchased and renovated local real estate.
“I would like to see where we have out-of-town developers,” he said.
While Siembieda fits that description, Cummings said the Renaissance Centre project “also expands the revitalization effort to a different section of State Street.”
EDDC projects have been focused a few blocks north of the Renaissance Centre.
Erie Insurance, Cummings said, “credits his vision for bringing in a top-tier downtown hotel and also his commitment to job training, creating public spaces and his commitment to inclusive entrepreneurship really makes him attractive to us.”
Loans are a possibility
In addition to millions of dollars that Erie Insurance has invested in Erie in the form of Opportunity Zone investments, the company has made at least one other loan to help bring a planned construction project across the finish line.
Boston-based Beacon Communities, owner of Richford Arms, an affordable housing apartment building for seniors at 515 State St., had plans for a $27 million upgrade and expansion of the building.
But it also faced a funding shortfall.
With help from a $3.5 million low-interest loan from Erie Insurance and a $2.45 million loan from the city of Erie, Beacon was able to complete that renovation.
In a January interview with the Erie Times-News, Erie Insurance CEO Tim NeCastro left open the possibility that the company would consider making other loans.
“Our company is selective about using loans.” he said. But, “in the community development arena, they are definitely part of the capital stack.”
Contact Jim Martin at jmartin@timesnews.com.
